What is Wholesaling?

What is Wholesaling?

According to Philip Kotler___”  Wholesaling consists of the sale and all activities in selling goods or services to those who buy for resale or business use”.
Wholesaling is the act of buying goods in bulk from a manufacturer at a discounted price and selling to a retailer for a higher price, for them to repackage and in turn resell in smaller quantities at an even higher price to consumers. Due to the large quantities purchased from the manufacturer at a discounted price, the wholesaler can also pass on this discount to retailers. The retailer sells at a price that reflects the overall cost of doing business.

Functions of Wholesaling

  1. Enable manufacturers and service providers to distribute locally without making customer contacts.
  2. Provide a trained sales force.
  3. Provide marketing and research support for manufacturers, service providers, and retail or institutional consumers.
  4. Purchase large quantities, thus reducing total physical distribution costs.
  5. It provides warehousing and delivery facilities.
  6. Provide credit facilities for retail and institutional customers, whenever required.
  7. Provide adjustments for defective merchandise.

Importance of Wholesaling

To Manufacturers:

  1. Concentration on production
  2. Facilities for large-scale production
  3. Information about consumer behaviors
  4. Regulation of production
  5. Reliving producers from keeping stock
  6. Financial assistance

To Retailers:

  1. Relief from keeping a huge stock
  2. Financial help
  3. Not affected by price fluctuations
  4. Provision of information
  5. Transportation facilities
  6. Trade discount
  7. Benefit of specialization

To Society:

  1. Support to Economic Growth.
  2. Facilitating Mass Consumption.
  3. Contribution to Other Business and Employment.
  4. Sustaining Market Equilibrium.